Key takeaways
National home prices hit a new record in May, growing by 0.39%. Prices have now grown for five consecutive months and are up 4.12% year-on-year.
Capital city markets led the gains over the month, rising 0.45%. Prices rose in all capitals. Sydney, Brisbane, Adelaide, Perth and Darwin are all now at price peaks.
Melbourne saw the strongest monthly rise (+0.79%), continuing its recovery after a prolonged period of softer growth. However, values remain 2.85% below their peak.
Despite Melbourne leading monthly gains, Perth’s median home value of $787,000 has overtaken Melbourne’s at $782,000 for the first time in a decade. This reflects Melbourne’s relative weakness compared to Perth’s persistent outperformance in recent years and affordability-driven demand.
Adelaide (+11.04%) led annual growth among the capitals, followed by Perth (+8.40%) and Brisbane (+8.38%). Although these markets continue to lead annually, momentum is increasing in Melbourne, Canberra and Hobart after lagging in 2024.
Regional prices rose 0.25%, with annual growth of 5.19% outpacing the combined capitals (+3.71%). Regional prices are now 65% higher than their levels five years ago.
National home prices rose 0.39% in May, marking the fifth consecutive month of growth and a new record high for Australian home values, according to the latest PropTrack Home Price Index.
Since the Reserve Bank’s February rate cut, price momentum has reaccelerated and broadened, with all capitals seeing prices lift.
Ms Eleanor Creagh, Senior Economist at PropTrack commented:
"National annual price gains now sit just above 4%, with capital city markets leading the charge and broad-based increases signalling growth becoming more synchronised across the country, and the divergence seen in 2024 narrowing.
Price growth across the capitals is starting to converge.
Melbourne, which previously lagged the other capitals, is now seeing home price growth pick up.
Cities such as Perth and Brisbane are now seeing growth moderate after strong outperformance.
The growth seen in all capital cities is underpinned by improved buyer sentiment and renewed confidence following interest rate cuts."
Source: PropTrack Home Price Index. 1 June 2025
Ms Eleanor Creagh, further explained:
“Lower interest rates have lifted borrowing capacities and boosted buyer demand.
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And with further price increases and rate cuts expected, prospective buyers are moving off the sidelines and accelerating their purchasing decisions."
House and unit prices lift in May
Nationally, house prices lifted 0.46% in May, while unit prices nationally rose 0.09%, according to PropTrack.
Ms Creagh said:
"National house prices have lifted 4.23% over the past year, growth in unit values (3.58%) has been weaker through the same period."
Outlook
Ms Creagh explains that lower interest rates have lifted borrowing capacity and boosted buyer demand.
And with further rate cuts expected, prospective buyers are moving off the sidelines, accelerating purchase decisions.
She further said:
"Looking ahead, while stretched affordability will remain a constraint, a chronic lack of new housing supply, population growth, and targeted buyer incentives are expected to keep upward pressure on prices.
In combination with interest rates continuing to move lower, these factors are likely to drive further price growth through the remainder of 2025."
